6 Counselor Rumors about Accepting Health Insurance

From seasoned veterans to recent graduates, today it seems that many in private practice are asking the same question, “Should I start accepting health insurance?” On the surface, it seems to be a simple question, but there’s much to consider in producing an informed answer. For any counselor, the decision of whether or not to accept third party payments will have broad sweeping implications for his/her counseling practice, with both pros and cons. For example—pro—insurance companies can provide a steady stream of clients to your practice, but they also—con—determine your reimbursement rates, require some administrative work, and they can hold providers accountable with periodic audits.

So, it’s a complicated decision, and it’s made unnecessarily more challenging as there’s also a fair bit of misinformation about working with insurance companies. In this column, we review seven rumors counselors often hear when they’re considering the option of whether to apply to become in network with insurance companies.

1) You should stay far away from insurance companies

In the same way that your parents might have told you “don’t do drugs,” some counselor’s mentors have warned them “don’t do insurance.”

The idea of starting a cash-only practice is enticing! There’s less fuss with billing, and you can set your own prices for services. The downside is that building a private practice, even with insurance, is hard work—starting a “cash-only” private practice can be even harder.

While some clinicians succeed, many counselors struggle to maintain a large enough cash-paying client base to make a living. This may be okay if a counselor wants only a part-time practice, or has a separate source of income.

2) Insurance companies are frustrating to work with

Are insurance companies frustrating to work with? Well, when it’s business as usual, insurance companies can actually be very easy to work with. Dare I say, you might even have a good working relationship with them! You see clients, submit claims, and receive payment for services provided. Pretty great, right?

That said, most counselors who’ve worked with a variety of insurance companies, over a sustained period of time, have a few stories to tell. Times when they received incorrect information about a client’s benefits, when some payments were late, or when a claim for whatever reason was paid incorrectly (or denied altogether). However, with over a decade’s experience working in managed care, I can attest that these issues are the exception, not the rule.

3) Insurance companies don’t pay well.

Do insurance companies pay poorly? Sometimes. EAPs tend to be a bit stingy. Cigna, in some areas, tends to reimburse on the lower end. However, the idea that insurance companies across the board don’t pay well is overstated. In many cities, the average intake appointment (90791) pays in excess of $100 for a Master’s-level mental health counselor. Ongoing appointments for individual therapy (90834/90837) might pay around $80.

Here’s the deal: If a counselor can fill his or her caseload with clients willing to pay these rates out of pocket, then, for them, accepting insurance might not make financial sense. On the other hand, if you’re struggling to sustain a caseload, or you find that your sliding scale keeps dipping lower than what insurance would otherwise pay, or if you just hate the idea of charging clients for something their insurance would pay for if you were in network, then perhaps accepting insurance is the better option.

4) You become an employee of the insurance company

Being in network with insurance companies does not make you an employee of insurance companies. You are simply affiliated, which means that you have been given approval to bill for authorized services rendered to their insured customers.

Still, I can understand the feeling. Being in network means that you’re willing to work within a framework: sessions are a designated length, you might need to seek authorization prior to providing services, you might need to provide a record of your clients’ progress back to the insurer. While this can feel restrictive at times, the accountability is not necessarily a bad thing, and it’s a long way off from having an employer.

5) There’s tons of additional documentation

As a licensed counselor, you’re ethically required to keep clinical documentation—a diagnostic evaluation, treatment plan, and progress notes for each client session. That’s also the extent of what most private insurance companies are asking you to document. In fact, insurance companies generally aren’t going to ask to see this documentation. Instead, what most insurance companies will ask for is more limited: dates of service, patient diagnosis, and procedure codes.

That said, there is also a medical billing process to complete, where you need to file claims for payment. Filing, tracking, and following up on claims can take time. For this, you could consider hiring a billing company.

6) You’ll be forced to see clients you don’t want to see

A common misconception, being in network with an insurance company does not require you to serve any particular patient or client. As long as you’re operating within ACA’s Code of Ethics, you still get to decide which clients you see, and which clients you refer.

7) All the good panels are closed

What does it mean to say that ‘a panel is closed?’ It means that the insurance company, at a given time, in a particular area (usually county), isn’t allowing new providers to join their network. Do some panels close from time-to-time? Yes. Are all the good panels closed? No. Truly, if you were to try and get on 10 insurance panels, in most areas you’re very likely to get on 9 of them on your first try and getting into all 10 isn’t unusual.

Dispelling Rumors

We’ve reviewed 7 misleading rumors about accepting insurance. That said, I’m not advocating that you accept insurance (I’m not getting a kickback from United Healthcare for writing this). There’s still a lot of information for any counselor to consider before deciding if managed care is right for their counseling practice. What do you think, is working with insurance good or bad for your practice and clients? Let me know your thoughts @anthonycentore or @thriveworks.

Anthony Centore

Anthony Centore Ph.D. is Founder and CEO at Thriveworks--a counseling practice, focused on premium client care, with 80+ locations across the USA. He is Private Practice Consultant for the American Counseling Association, columnist for Counseling Today magazine, and Author of How to Thrive in Counseling Private Practice. Anthony is a multistate Licensed Professional Counselor and has been quoted in national media sources including The Boston Globe, Chicago Tribune, and CBS Sunday Morning.

5 Comments

Insurance clients are often less motivated and invested in treatment, because they are in effect not paying for services rendered. Reimbursement also is not as good as with a self-paying client. I feel too many counselors, etc. have become made to think that insurance clients are needed to succeed. Do massage therapists take insurance only clients? Do restaurants that these clients go to take their insurance? Counselors with a medical lean in cohorts with psychiatrists, etc. may do well with insurance, but not all counselors work this way.

I find the more difficult aspect of beginning a private practice is securing an income during the build up period. You’re new to the area (at least in terms of your counseling practice availability) and while people are finding out about you and referrals begin trickling in, you also have to find a means of supporting yourself and possibly a family. I don’t know what the average start up time is before you accumulate enough clients and return clients to support yourself, but it’s more difficult than I think most realize. Your location and availability of other similar services will significantly impact your bottom line and future as well. Good luck.

I am finding out the hard way that a cash only private practice is VERY difficulty for certain populations and areas in a recession. I am in my second year of private practice and despite getting regular referrals most potential clients just cannot afford to pay the full rate and at times I end up sliding my fee BELOW what insurance would cover to get them in the door. There I have had to cave and apply to get on insurance panels. Its better to have many clients at moderate reimbursement rates than few clients at a high reimbursement rate. It’s the nature of the beast.

Greetings Psych Doctor,
Thanks for the comment! I agree–cash pay practice often struggle with retention, as cash pay clients might come less frequently, or terminate counseling early. Using insurance take a lot of the financial burden from clients!